To Settle or Not to Settle - American Express Charged Off 4 years Ago

[LifeSAVERS]

Although, I have popped in to search a question, or recently ask regarding a pending collection suit.  After a very difficult last 4 years financially, things are making a change that I never would have expected.  In a Great Way!  New job, high pay, solid company, etc.

With that said, I have settled on a couple of PRA collections recently and  have a couple PRA that are past SOL that I will sit on for now.  I also have a couple of lawsuits I answered, over 2 years ago, that have not sent any communication since.  I requested the actual signed contract, in my answers, and they are not, more than likely, able to provide.  They are now in limbo until they fall off in 3 years.  All of my collections are last payment December 2015, except for the American Express, which is a few months earlier.

American Express is another animal all together.  They have not sent the account to collections, have updated every month on my credit report as a late payment (score dropped again 12 points on Oct 2nd due to their reporting, even though the account shows charged off over 4 years ago), and have just today sent a settlement offer letter.  The response by date is October 20th.

The balance owed on the account in the letter is $10,368.91.  I would prefer to not to take one of the settlements ($4147.56 - 1 pmt)($4666.08 - 12 pmts of $388.84) or ($5184.48 - 24 pmts of $216.02), but make payments against the full balance to try to get back into American Express good graces in a couple of years.

Does anybody have any history/experience with working on settlements and/or charge offs with American Express?  Would it be just as well to take the 3rd option of 24 monthly payments for $5184.48?  As American Express may consider being burned and black list me permanently I believe they will provide a 1099 for the difference/write-off not paid, which will require additional taxes due.

I appreciate any help, words of wisdom, and suggestions!

[FireMedic1]

If you pay them back in full, you'll be off the black list, and more than likely be sent a letter offering you a chance to get back in with their Oasis card program. Settled, forget about it. The lawsuits can be dicey. They might be quiet now, but closer to fall off date. You may more than likely hear from them in a more agressive way. Good Luck!

[LifeSAVERS]

Thank you @FireMedic1 for your speedy response. I agree, and as the opportunity to pay back the original creditor in full, is part of the rebuild, it is also the right thing to do.

Thanks again, and I will call them tomorrow to see what they can come up with for payments. Hoping they might accomodate graduated, like $250-300/m first 6 months, than bump to $400-500/m. This will allow for solid footing, so this does't happen again.

[Anonymous]

It seems that most creditors I’ve read about, when approached by a consumer about paying in full on a bad debt, are willing to work out a reasonable arrangement. I think your proposal is reasonable with the initial $250-300 monthly. If you want to then increase it later, I very much doubt they’ll object. From what I’ve read from others, you should bring up Optima/Oasis when you speak to them regarding the payoff, as it’s said that this card is usually used as an incentive to get someone paying. Once they’re in a payment plan, it may not be on the table anymore.

[LifeSAVERS]

Thank you for the tip @ImTheDevil and I will ask about the Optima/Oasis program.  I received a new letter dated 10/21/2019 with an offer expiration of 11/15/19. They moved the 12 month payoff amount to 24 months on the new letter, so I believe the monthly as you stated $250-300 to payoff might (hope) be agreeable to them. I will be negotiating for full pay off and will update here after I contact them.  I only have the time of 4:45pm-6pm M-F to contact them, based on their hours for payment arrangements.  I leave at 5:30 am and return to town at 4:30 pm M-F (no lunch and no privacy in office).  Will have to set an alarm on my phone to get it done! 

[Anonymous]

Sounds good - let us know how it goes